NCSL Tools for State Legislatures:
Medicare Prescription Drug Coverage
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Updated: November 9, 2009
History: The Medicare Part D Prescription Drug Program started January 1, 2006. After the the first year of operation, for 2006 Medicare announced that more than 38.3 million Medicare beneficiaries were receiving prescription drug coverage. More than 93 million prescriptions were filled for these beneficiaries with drug coverage during March -- averaging 3 million prescriptions filled per day.
For 2010, the open enrollment period runs from November 15 to December 31, 2009. Dual eligibles and persons newly eligible for Medicare (turning age 65, etc.) may sign up throughout 2009 and 2010. Beginning November 15, Medicare’s 46 million beneficiaries will have an opportunity to sign up for coverage under a Medicare Advantage plan or a Medicare stand-alone Part D drug plan, or change plans if they are already enrolled in either type of plan.
NCSL worked with the Centers for Medicare and Medicaid Services (CMS) to provide timely, user-friendly materials to state legislators so they may inform their constituents, colleagues, friends, family members and loved ones about the opportunities and requirements for the new benefit. (1)
This web page provides helpful and updated materials. Most of the material is designed so you can print or download copies for your own use in your district. We will provide more information to you as it becomes available.
2010 Pharmacetitcals Part D Resources (provided in part by Kaiser Family Foundation, 11/9/09)
The Kaiser Family Foundation is issuing a collection of new and updated analyses examining critical elements of the private plan options available to Medicare beneficiaries in 2010.
Medicare beneficiaries continue to have a wide range of options to choose from, with an average of 33 Medicare Advantage plans and 46 stand-alone Part D drug plans available to seniors and disabled Medicare beneficiaries.
For both types of plans, beneficiaries could face substantial increases in their premiums if they stay in the same plan for 2010. For example, for Medicare Advantage enrollees who stay in the same plan in 2010, monthly premiums will increase by 32 percent on average, with a steeper 78 percent average increase for enrollees in private fee-for-service plans who do not switch plans.
Among the stand-alone Part D plans, relatively few help beneficiaries with the costs of their medications while in the coverage gap, or “doughnut hole,” and those that do usually cover only generics, or a small number of brand-name drugs. One third of the few plans that offer gap coverage charge more for generic drugs in the gap than they do for the same drugs in the initial coverage period. Health reform legislation now pending in both chambers of Congress includes provisions aimed at easing the potential impact of the coverage gap on Medicare beneficiaries.
Kaiser’s new and update resources include:
Analysis Finds Average Monthly Medicare Drug Plan Premiums To Rise 11 Percent In 2010 If Beneficiaries Stay In Their Current Stand-Alone Drug Plans. Monthly premiums for Medicare beneficiaries who are enrolled in Part D stand-alone prescription drug plans will rise 11 percent on average to $38.85 in 2010 if beneficiaries stay in their current plans, according to a new Kaiser Family Foundation analysis of the 2010 Part D plan offerings. Average monthly premiums have gone up by 50 percent for stand-alone Part D prescription drug plans since the launch of Medicare’s drug benefit in 2006, when monthly premiums averaged $25.93, the analysis finds.
The Medicare Drug Benefit: Update on the Low-Income Subsidy
The Medicare drug benefit (Medicare "Part D"), provides federal subsidies to pay premiums and cost sharing for low-income beneficiaries---almost 10 million in 2009. Yet there are several policy issues concerning these low-income beneficiaries under Part D. First, over 2 million individuals who may qualify for the subsidies have not enrolled. Second, in some states, low-income beneficiaries have little choice of plans (while non low-income beneficiaries have dozens of choices), unless they pay out-of-pocket for premium amounts above what the subsidy covers. And third, millions of those who have enrolled in the benefit face the prospect each year of switching drug plans or paying more to keep their current drug plan. Published by National Health Policy Forum, August 2009.
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Includes archive materials, 2006-2008
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- State-Specific Medicare Drug Plan Information Now Available
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“Medicare’s Practical Guide to the E-Prescribing Incentive Program” is now available online. The guide explains the e-prescribing incentive program, how eligible professionals can participate, and how to choose a qualified e-prescribing system.
By adopting e-prescribing through Medicare’s program, eligible professionals can save time, enhance office and pharmacy productivity, and improve patient safety and quality of care while earning incentives from Medicare.
For additional information about e-prescribing, you can also visit:
-www.cms.hhs.gov/PQRI. Select “E-prescribing Incentive Program”;
-www.cms.hhs.gov/eprescribing. (for information on Part D e-prescribing standards that will be effective April 1, 2009); and
-www.ehealthinitiative.org to download “A Clinician’s Guide to Electronic Prescribing.”
- Medicare Prescription Drug Plan Finder, 2009 - the CMS official online consumer tool that allows anyone to compare plans, features and costs by state. (online enrollment available November 15- December 31, 2008)
- The Medicare Rx Formulary Finder, 2009 which allows a user to enter a typical combination of drugs used by people with a certain condition to find out which plans in an area have formularies that cover these drugs.
- HRSA: Part D Information for 340B Pharmacy Providers
- CMS Retiree Drug Subsidy (RDS) Program
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Rx Sessions at NCSL Fall Forum in San Antonio, Texas - December 7, 2006.
Update on State Actions Related to Medicare Part D Prescription Drug Coverage
On January 1, 2007, the second year of Medicare pharmaceutical benefits began. Many states continue to play a significant role for seniors and persons with disabilities needing medicines - by providing "wrap around" subsidies for premiums and coverage gaps, by problem-solving and by sponsoring programs for those not eligible for Medicare. New commercial plan designs, questions about state "clawback" payments, Medicaid program responses and possible actions in Congress all loom as legislators prepare to tackle state pharmaceutical budgets and policy. Four experts share news and trends.
- Steven McAdoo, Deputy Regional Administrator, Centers for Medicare and Medicaid Services (CMS Region 6), Dallas, Texas | PowerPoint [3.8 Mb]
- Richard Cauchi, Health Program Director, NCSL Staff, Colorado | PowerPoint
- Joy Johnson Wilson, Health Policy Director, NCSL staff, Washington, DC
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Annual Meeting Rx Sessions - held August 16, 2006 in Nashville, TN.
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"Medicare Prescription Drug Coverage and the States" - Even with the Medicare Part D Program well underway, states continue to play important roles in prescription drug coverage for millions of low-income people. In addition to supplementing the new federal coverage, many states are modifying their State Pharmaceutical Assistance Programs and making adjustments to Medicaid and other Rx programs.
* Vernon Smith, Principal, Health Management Associates, Lansing, Michigan PowerPoint Online  | html
* Assemblymember Richard Gottfried, Chair, Assembly Health Committee, New York State
* Gloria Parker, Associate Regional Administrator, Centers for Medicare and Medicaid Services, Region Four, Atlanta, Georgia PowerPoint Online
* Edward Belkin, VP for Communications and Public Affairs, Pharmaceutical Research and Manufacturers of America, D.C. PowerPoint Online
* Moderator: Senator Judy Lee, North Dakota
- "Prescription Drug Discounts: from 340B to Consumer Cards." - For the 40+ million Americans not on Medicare or comprehensive private insurance, access to prescription drugs remains a visible concern. The federal 340B drug discount program provides one significant option - including a fast-expanding network of clinics and pharmacies in every state. In addition, user-friendly industry-sponsored assistance cards and new state discount laws keep pharmaceuticals near the top of policymakers' priority lists.
* Harry Hagel, Senior Director, HRSA Pharmacy Services Support Center, Washington, DC PowerPoint Online
* Roba Whiteley, Executive Director, Together Rx Access, Alexandria, Virginia PowerPoint Online | html
* Moderator: Senator Renee Unterman, Georgia
- NCSL MEDICARE RESOURCE CENTER updated 7/06.
- State Pharmaceutical Assistance Programs in 2006-07: Helping to Make Medicare Part D Easier and More Affordable An analysis of laws and regulations providing state-funded prescription drug wrap around benefits, coordination and ease of enrollment for 1.5+ million residents in more than 20 states. Updated regularly. [30 pages]
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State Transitional and Emergency Coverage for Medicare Part D - An archive of special funding and powers used January-July 2006.
- 2005 Medicare and State Pharmaceutical Coordination Legislation - NCSL's report - featuring 130+ bills in over 40 states.
- Medicare Part D: Latest State Updates. NCSL SPRING FORUM- RX Session: held Friday, April 7, 2006 in Washington DC. As part of their ongoing efforts to help Medicare. Speakers:
* Joseph Fine and Cora Tracy, [PowerPoint download / slides] - Centers for Medicare and Medicaid Services, Baltimore, MD.
* Richard Cauchi and Donna Folkemer, [PowerPoint download / slides] -NCSL staff Directors, Denver and Washington, DC.
- "Legislators and Medicare Prescription Benefit" -Web-assisted audio conference: 11/7/05
* Speakers: Leslie Norwalk, Deputy Administrator, CMS [PowerPoint]
* Rep. Betty Boyd (CO), Vice-Chair of NCSL Health Committee [PowerPoint]
* Donna Folkemer, Director, NCSL Forum for State Health Policy Leadership.
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OTHER RESOURCES, 2009-2010:
- Medicare Health and Prescription Drug Plan Tracker, 2009, an interactive resource with new 2009 data about Medicare Advantage and Medicare Prescription Drug Plans and with 2008 enrollment data, by the The Kaiser Family Foundation. 10/31/08.
- Medicare Prescription Drug Plans in 2008 and Key Changes Since 2006: Summary of Findings - Kaiser FF fact sheet, 4/2/08. [7 pages PDF ]
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The Centers for Medicare & Medicaid Services (CMS) has issued guidelines to Medicare Part D plan sponsors that will make it easier for low-income beneficiaries to take advantage of subsidies that help cover their pharmaceutical costs. The guidelines clarify procedures for accepting best available evidence (BAE) from Part D recipients, their pharmacists, advocates, or family members when those individuals claim to be eligible for the low-income subsidy (LIS), but health plan and CMS records do not.
The guidelines, issued Aug. 4, 2008, supersede all previous guidelines on the topic. They require a plan to provide Part D drugs at the appropriate cost-sharing subsidy when specific evidence of eligibility is provided, and to require plans to update their own systems to reflect any corrected LIS status indicated by the best available evidence. Also, if CMS systems do not reflect the updated information, the plan must submit a request for correction to the CMS benefits coordination contractor IntegriGuard. A coalition including the patient group Center for Medicare Advocacy, the National Senior Citizens Law Center (NSCLC) and the American Society of Consultant Pharmacists helped CMS develop the new rules. (Reprinted with permission from Safety Net Hospitals For Pharmaceutical Access, 9/08; All Rights Reserved)
- State-level Medicare Part D Plan Characteristics, A 2007 Update - Kaiser FF fact sheet, 3/07
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"The Impact Of Medicare Part D On Prescription Drug Use By The Elderly," - A new study examining the effect of the new Medicare prescription drug benefit on the elderly shows that it led to the consumption of an additional 158 million prescriptions in 2006 at a cost of $32 billion to Medicare. Many seniors already had prescription drug coverage, so the new benefit reduced the average amount paid by seniors per day of therapy by 18.4 percent, and increased the elderly's prescription drug use by only 13 percent. As for the crowd-out rate, the researchers found that every seven prescriptions paid for by the government crowded out five prescriptions and resulted in only two additional prescriptions used. The federal government spent about $203 for each additional prescription for the elderly, or about 3.5 times as much as the average price ($57) for a prescription in 2006. published by Health Affairs, Nov/Dec 2007.
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(1) The web page was initiated as a partnership between NCSL and CMS in 2005. The 2008 edition is produced and edited by NCSL, which is entirely responsible for editorial content.
(2) Beginning in 2006, CMS allowed group PFFS plans to submit one national plan application that covers retirees throughout the entire country, instead of submitting multiple applications that target specific counties where retirees live. This applies to non-network PFFS plans only. States may still require plans to be licensed even though CMS does not. "2006 Employer/Union-Only Non-Network Private Fee-For-Service (PFFS) Plan Service Area Waiver Guidance."
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Featured Links
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The U.S. House Committee on Oversight and Government Reform Report: "Private Medicare Drug Plans"
Administrative costs of Medicare Part D are six times higher than the cost of traditional Medicare.
Drug manufacturer rebates received by Part D insurers are significantly smaller than rebates received by Medicaid.
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"States have very little regulatory authority [under Medicare], and we're concerned we can't hold Medicare Advantage plans responsible for their [sales] agents' actions. That ties our hands behind our backs."
— Guenther Ruch, administrator of Wisconsin's Department of Insurance', speaking at AHIP's Medicare conference 9/22/08.
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